Call It A Comeback
It’s one poll, but certainly interesting.
* Halvorson leads Ozinga by a 48% to 29% margin, with Green Party candidate Jason Wallace at 5%. Halvorson has built a sizeable 19-point lead, but still needs a few points of expansion in order to win.
[youtube]http://www.youtube.com/watch?v=EuMkju_90Lo[/youtube]
Really weird. The whole bit about SCHIP really is where it really goes off the rails.
Tribune Endorses Democrat for President
Obama is deeply grounded in the best aspirations of this country, and we need to return to those aspirations. He has had the character and the will to achieve great things despite the obstacles that he faced as an unprivileged black man in the U.S.
He has risen with his honor, grace and civility intact. He has the intelligence to understand the grave economic and national security risks that face us, to listen to good advice and make careful decisions.
When Obama said at the 2004 Democratic Convention that we weren’t a nation of red states and blue states, he spoke of union the way Abraham Lincoln did.
It may have seemed audacious for Obama to start his campaign in Springfield, invoking Lincoln. We think, given the opportunity to hold this nation’s most powerful office, he will prove it wasn’t so audacious after all. We are proud to add Barack Obama’s name to Lincoln’s in the list of people the Tribune has endorsed for president of the United States.
Smart move and it includes collateral for the state:
The billion-dollar bank deposit will move state money away from more conservative investments whose returns are dropping as skittish investors flock to them, Giannoulias said. But the bank deposits will be protected by collateral, he said.
Under the plan, any state-chartered bank or national bank with an Illinois branch may request as much as $25 million. The major banks from which President Bush proposes the federal government buy $250 billion in shares using the federal rescue fund are not eligible.
Broadway Bank in Chicago, owned by the Giannoulias family, does not do any state business and will not participate, Giannoulias spokesman Scott Burnham said.
Banks would have to repay the money within a year — Giannoulias said many need money just for a few months.
Lee O’Neill, president and CEO of Champaign-based Busey Bank, said businesses crimped by the economy draw more on savings and other deposits. That leaves less capital for Busey to satisfy a growing loan demand in its Champaign, Peoria and Decatur locations.
“The treasurer’s attempting to get an acceptable rate of return but at the same time make sure banks have access to funds to take care of their community needs,” O’Neill said.
It’s the right thing to do even if the state wasn’t improving its return, said Leo Harmon, senior director of Chicago-based Fiduciary Management Associates and a member of the treasurer’s external investment advisory board.
Harmon said the plan alleviates strain on banks that want to keep investing in communities and boosts confidence among depositors that they’re protected. Even healthy banks can lose customers’ trust, suffer mass withdrawals and slide quickly into trouble.
“Once you lose confidence in a bank and its ability to keep your money safe, you can create a huge domino effect that can really bring a bank down which otherwise would have been able to get through a tough situation,” Harmon said.
Giannoulias predicted other states would follow Illinois’ lead. Aside from the $700 billion federal bailout, state and local governments have not, for the most part, entered the fray. New Jersey Gov. Jon Corzine said Monday that state purchases of foreclosed homes could be part of a broad economic stimulus package he also planned to announce Thursday.
“We’re trying to find ways to free up money, free up capital, for Illinois families and businesses who really need to be able to go to their bank and get that capital and also reassure depositors that their money is safe,” Giannoulias said.
A one-year bank deposit currently earns an average 3.2 percent in interest, up from about 2.25 percent in April. By comparison, one-year Treasury bills are earning 1.2 percent and money markets have fluctuated between 2.2 and 2.8 percent in the past month.
Bean goes from Likely Dem to Solid Dem. No surprise there. Massive movement though in the chart overall towards Dems–only 14 and 8 affected recently in Illinois. Mahoney in Florida the only Dem moving towards more risk and that’s not a bad thing given what a schmuck the guy is.
Only wingnuts think this was a persuasive response:
[youtube]http://www.youtube.com/watch?v=0N_UfQVuvXo[/youtube]
There are about one thousand ways to address the issue and not alienate everyone to the left of Jill Stanek. John McCain chose to not try any one of those one thousand ways.
Really? That Obama is reading Zakaria’s book The Post American World is a scandal?
Here’s IR’s blurb of the Amazon blurb:
“…describing a world in which the United States will no longer dominate the global economy, orchestrate geopolitics, or overwhelm cultures.”
A work by Zakaria that,
“…sees the “rise of the rest”—the growth of countries like China, India, Brazil, Russia, and many others—as the great story of our time, and one that will reshape the world. The tallest buildings, biggest dams, largest-selling movies, and most advanced cell phones are all being built outside the United States. This economic growth is producing political confidence, national pride, and potentially international problems.”
Here’s the full blurb:
“This is not a book about the decline of America, but rather about the rise of everyone else.” So begins Fareed Zakaria’s important new work on the era we are now entering. Following on the success of his best-selling The Future of Freedom, Zakaria describes with equal prescience a world in which the United States will no longer dominate the global economy, orchestrate geopolitics, or overwhelm cultures. He sees the “rise of the rest”—the growth of countries like China, India, Brazil, Russia, and many others—as the great story of our time, and one that will reshape the world. The tallest buildings, biggest dams, largest-selling movies, and most advanced cell phones are all being built outside the United States. This economic growth is producing political confidence, national pride, and potentially international problems. How should the United States understand and thrive in this rapidly changing international climate? What does it mean to live in a truly global era? Zakaria answers these questions with his customary lucidity, insight, and imagination.
When you are cutting Amazon reviews up to make it sound more ominous, you just need some serious mental help.
If these clowns didn’t exist, I’d have to invent them
The eerie chants of innocent schoolchildren singing praises to a Chicago Politician, “We’re gonna spread happiness, we’re gonna spread freedom, Obama’s gonna change it, Obama’s gonna lead-um. We’re gonna change it and rearrange it. We’re gonna change the world” are more chilling than any Steven King script.
Since when did we look to our politicians to bring us happiness? There has been a sense that something is very wrong, but I just couldn’t’t put my finger on it. Is it Providence? Or something else?
After reading this morning’s The Cloward-Piven strategy- Using the poor to tear down capitalism, by a retired Air Force colonel, and former strategist for the White House, Robert Chandler, it’s becoming clear that we may be involved in a civil war we never knew existed. The implosion of our banking system may have been an attack on capitalism with a fuse that stretched back to the mid-sixties.
BTW, it’s Stephen and he writes books primarily. And a great column in Entertainment Weekly. Best pop culture column out there.
Define and explain credit default swaps.
M.T.: So how are you feeling about McCain’s chances today?
B.Y.: I’ve just finished an article for National Review — the actual magazine — about the headwinds McCain faces. I was going to look at three, and then I started to list them. I stopped at ten. New Gallup numbers out today show that George W. Bush’s job approval rating remains at 25 percent, while his disapproval rating has ticked up to 71 percent. How hard is it to succeed a two-term president of your own party who is at 25-71? We don’t know because it’s never been done.
M.T.: Yeah, that’s a damned shame, too. I feel really badly for the guy. I suppose you think the media coverage is also a headwind?
B.Y.: Actually, I did not list media coverage among the headwinds. I listed the succeed-a-two-term-president problem, the right-track/wrong-track problem, the Republican-Democrat-enthusiasm gap problem, the Republican-Democrat-I.D.-gap problem, the financial meltdown, Iraq, Republican gloom on Capitol Hill, Obama’s fund-raising advantage, and McCain’s historical problems with the GOP base.
M.T.: But all of those “headwinds,” or almost all of them, are the direct result of McCain having supported policies that are now unpopular. There is absolute justice in his facing a “headwind” from the financial meltdown, from the unpopularity of the Iraq war, and so on. How is that a “headwind”? That’s just self-created unpopularity.
I mean, his onetime campaign co-chair and top economic adviser, Phil Gramm, basically created the credit-default-swap market back in 2000. Why shouldn’t he get hammered on the financial crisis?
B.Y.: Did I suggest that headwinds are unfair? But on the financial meltdown in particular, if you’re suggesting that that is a Republican creation, or even more specifically a McCain creation, I think you’re on pretty shaky ground.
M.T.: You don’t think the unregulated CDS market was a major factor in the current crisis? Were you watching when AIG almost went under? Were you watching the Lehman collapse?
B.Y.: I think that Fannie Mae and Freddie Mac were also major factors. And I believe that many of the problems in the mortgage area can be attributed to the confluence of Democratic and Republican priorities: the Democrats’ desire to give mortgages to people, particularly minorities, who could not afford them, and the Republicans’ desire to achieve an “ownership society,” in part by giving mortgages to people who could not afford them. Again, I believe that if you are suggesting that the financial crisis is a Republican creation, or even more specifically a McCain creation, I think you’re on pretty shaky ground.
M.T.: Oh, come on. Tell me you’re not ashamed to put this gigantic international financial Krakatoa at the feet of a bunch of poor black people who missed their mortgage payments. The CDS market, this market for credit default swaps that was created in 2000 by Phil Gramm’s Commodities Future Modernization Act, this is now a $62 trillion market, up from $900 billion in 2000. That’s like five times the size of the holdings in the NYSE. And it’s all speculation by Wall Street traders. It’s a classic bubble/Ponzi scheme. The effort of people like you to pin this whole thing on minorities, when in fact this whole thing has been caused by greedy traders dealing in unregulated markets, is despicable.
B.Y.: I was struck by the recent Senate testimony of James Lockhart, who is head of the Federal Housing Finance Agency, about the sheer recklessness of Fannie in recent years. Despite “repeated warnings about credit risk,” Lockhart testified, Fannie became more reckless in 2006 and 2007 than they had been in the scandal-ridden tenure of Franklin Raines (who departed in 2004). In 2005, Lockhart said, 14 percent of Fannie’s new business was in risky loans. In the first half of 2007, it was 33 percent. So something terribly wrong was going on there, and it became a significant part of the present problem.
M.T.: What a surprise that you mention Franklin Raines. Do you even know how a CDS works? Can you explain your conception of how these derivatives work? Because I get the feeling you don’t understand. Or do you actually think that it was a few tiny homeowner defaults that sank gigantic companies like AIG and Lehman and Bear Stearns? Explain to me how these default swaps work, I’m interested to hear.
Because what we’re talking about here is the difference between one homeowner defaulting and forty, four hundred, four thousand traders betting back and forth on the viability of his loan. Which do you think has a bigger effect on the economy?
B.Y.: Are you suggesting that critics of Fannie and Freddie are talking about the default of a single homeowner?
M.T.: No. That is what you call a figure of speech. I’m saying that you’re talking about individual homeowners defaulting. But these massive companies aren’t going under because of individual homeowner defaults. They’re going under because of the myriad derivatives trades that go on in connection with each piece of debt, whether it be a homeowner loan or a corporate bond. I’m still waiting to hear what your idea is of how these trades work. I’m guessing you’ve never even heard of them.
I mean really. You honestly think a company like AIG tanks because a bunch of minorities couldn’t pay off their mortgages?
B.Y.: When you refer to “Phil Gramm’s Commodities Future Modernization Act,” are you referring to S.3283, co-sponsored by Gramm, along with Senators Tom Harkin and Tim Johnson?
M.T.: In point of fact I’m talking about the 262-page amendment Gramm tacked on to that bill that deregulated the trade of credit default swaps.
Tick tick tick. Hilarious sitting here while you frantically search the Internet to learn about the cause of the financial crisis — in the middle of a live chat interview.
B.Y.: Look, you can keep trying to make this a specifically partisan and specifically Gramm-McCain thing, but it simply isn’t. We’ve gone on for fifteen minutes longer than scheduled, and that’s enough. Thanks.
M.T.: Thanks. Note, folks, that the esteemed representative of the New Republic has no idea what the hell a credit default swap is. But he sure knows what a minority homeowner looks like.
B.Y.: It’s National Review.
Taibbi is hysterical here, but there is no recognition from those who are trying to blame the entire problem on Freddie, Fannie and the CRA that the complete lack of regulation created by Gramm led to an unregulated market in derivatives that few people understood and no one checked to see if there were adequate reserves to back up these instruments.
Obviously, there were not. But to point out for the umpteenth time, Fannie and Freddie had little exposure directly to the subprime mortgage market. Their exposure came from buying mortgage backed securities to boost their profits. The problem with Freddie and Fannie then was not their lending practices, but their investment practices. Same problem we see with the investment banks and others who bought up the securities without any real idea of what the securities were really worth.
The situation was only made worse with insurance companies like AIG backing the credit default swaps without any regard to reserves or real risk and with no one to even regulate the reserves for the risks they took. And AIG’s problems aren’t done yet–they still have a ton of obligations for the Lehman collapse where they provided insurance for many of their products. Oops!
As I’ve pointed out previously though, Fannie and Freddie products weren’t the problem. Fannie and Freddie’s problem were products they bought from other issuers. Here, there is certainly room to criticize HUD and a lack of regulation for Fannie and Freddie, but not in the way that most conservatives are doing it. They are trying to connect CRA, Fannie and Freddie, and subprime lending as all one phenomenon. That’s not the case at all as Fannie and Freddie products originated as such are seldom subprime. CRA loans are also usually not subprime. CRA has nothing to do with the current problems.
Where Fannie and Freddie intersected on the subprime market was in buying subprime MBSs from others and then HUD gave them affordable housing credits for buying up those MBSs which is both unethical in promoting crappy lenders who exploited those who were poor and had bad credit and incredibly stupid in exposing Fannie and Freddie to risk that would not normally exist for them. And it broadened the market for such instruments leading to a far greater incidence of predatory lending.
Where it gets really odd is in trying to blame ACORN housing for the crisis. ACORN housing does a lot of affordable housing work focusing on middle and lower income families. Much of that includes putting people together with lenders who are stable and offer reasonable products instead of putting people into ARMs and other gimmicks. It also often includes credit counseling which decreases the risk of default by half.
But most of all, ACORN has been blowing the whistle on predatory lending for years such as in this report from 2001. In addition, ACORN provides free counseling to individuals and the tools to avoid bad loans in addition to insisting people get their credit and budget into order. Some loans are then subprime, some are not, but they are all made with reasonable income and debt to income ratios.
They also fought predatory lenders like Ameriquest
In a $360 million commitment for consumer safeguards against predatory lending Ameriquest Mortgage Co. has agreed to standards it says could define the ethics in home mortgage lending.
Under the three-year pilot program, Ameriquest will make subprime mortgage financing available to residents in up to 10 low and moderate-income urban neighborhoods while ACORN (Association of Community Organizations for Reform Now) and its affiliate ACORN Housing Corporation will provide consumer information, financial education and loan counseling services to community residents.
ACORN, the nation’s largest low and moderate-income membership organization, has been waging an in-your-face war against predatory mortgage lending and since last fall staged a steady stream of local protests against Ameriquest Mortgage Company.
In March more than 400 ACORN members from around the country stormed the Washington, DC office of Salomon Smith Barney, which purchases loans from Ameriquest. Later that same day, the 400 ACORN members took over an Ameriquest office and occupied it for over an hour until Ameriquest’s president called from California and agreed to meet and negotiate about how Ameriquest should improve their practices.
Look at the 2005 listing for the biggest Subprime lenders:
Most are indpendent mortgage companies. Big surprise as they were the least regulated and not subject to the CRA. Of course, when ACORN works with lenders they tend to work with banks like Bank of America and Citimortgage, both of whom are relatively healthy.
So how is it that ACORN caused the problem?
Schock apparently has problems with them in addition to Mike Sweeney
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